In 1979, the Inflation Rate Reached About 14 Percent

Multiple Choice

In 1979, the inflation rate reached about 14 percent. The Federal Reserve ________ interest rates, sending the economy into a(n) ________. When doing so, the Federal Reserve knew this would be the case because of the ________.

A) raised; expansion; Phillips curve
B) raised; recession; Phillips curve
C) raised; recession; Okun relationship
D) lowered; recession; Phillips curve
E) lowered; expansion; Phillips curve